Supply chain transparency: a panel interview with the experts

We sat down with experts and innovators of supply chain transparency, in seafood and beyond, to better understand the value proposition for pursuing and achieving transparency. We wanted to understand how companies are treating transparency as a business opportunity rather than an obstacle. Whether you’re a seafood retailer, distributor, supplier, or a fisher on the water, there is real, demonstrable value in striving for transparency in your work. But don’t take it from us; hear what the experts have to say in our group Q&A.

Who we interviewed

Pelagic Data Systems

Melissa Garren, Chief Scientific OfficerPelagic Data Systemsis the creator of ultra-lightweight vessel tracking systems for boats of all sizes. Their innovative technology is completely solar-powered and affordable, and helps fishers and regulators alike collect the fishing data they value most.

Asda

Chris Brown, Senior Director Sustainable BusinessAsda is a large grocer and retailer taking a leadership role in sustainability efforts in their sector. They teamed up with Sustainable Fisheries Partnership to be the first supermarket to publish comprehensive data on the fisheries that supply their stores.

World Cocoa Foundation

Jennifer Golden, Director of Monitoring & EvaluationThe World Cocoa Foundation is an international membership organization that promotes sustainability in the cocoa sector. WCF provides cocoa farmers with the support they need to grow more quality cocoa and socially and economically strengthen their communities.

Fair Trade USA

Julie Kuchepatov, Seafood DirectorFounded in 1998, Fair Trade USA is the leading third-party certifier of Fair Trade goods in North America and reaches 1.7 million producers globally. In 2014, the non-profit organization adapted its proven agricultural certification model to support small-scale fisheries and shift the seafood industry toward more socially and environmentally sound practices.

The interview

What do you think is the future of traceability and transparency?

Before talking about traceability and transparency we need to differentiate the two. Traceability refers to tracing the product throughout the value supply chain; whereas transparency can relate to the sharing of all types of data and information – with respect to financial flows, sustainability practices, impact, and so on. There is a trend toward more of both which is driven by increased demand from companies throughout the value chain, consumers, civil society organizations, governments and other stakeholders. In terms of traceability one issue will continue to be the value-add of traceability as compared to the cost associated with tracing back from the chocolate bar up the value chain throughout the different touchpoints to the smallholder farmer. There are some innovations especially in technology that have potential to close this gap. Read Jennifer’s full interview >>

The marketplace expectations for traceability and transparency seem destined to grow, especially considering we are moving ever deeper into the digital age. Many people, particularly younger generations, expect nearly all information to be readily available at all times. Adding those elements of traceability and transparency into new products is no longer an “add-on”; they are necessities that should be a key component of any long-term business plan. Read Melissa’s full interview >>

This area is going to be a high priority for all types of food chains. Seafood has had to develop with IUU regulations and the like. I anticipate technology providing more rapid and accessible routes to ‘walk’ supply chains. I also expect consumer expectations of open data to rise. Asda contributes to the SFP Ocean Disclosure Project which gives full disclosure of our sourcing and the sustainability assessment. Read Chris’s full interview >>

Full traceability allows seafood products to be traced throughout the supply chain back to the point of harvest. Currently, transparency of product flow from high seas vessels, out at sea for months at a time and where transshipping of product often occurs, is lacking. How to ensure effective and accurate traceability through monitoring and enforcement on such vessels is the nut to be cracked. Many strides have been made in traceability technologies, but they alone are not enough. Monitoring and enforcement must be a part of the equation to guarantee a fully traceable seafood supply chain and ensure the legality, safety, and sustainability of the product.

In seafood, a lot of distributors already have systems in place to trace fish back to vessels, but the challenge is moving that info through the supply chain. In the future, we need to emphasize the importance of communicating this information throughout the supply chain and ultimately to the consumer through proactive, transparent reporting. Read Julie’s full interview >>

How does your company, or your client companies, think about traceability? Do they think about it mainly in terms of supply chain management, or as a way to communicate to the marketplace?

Our customer survey data shows customers are concerned about green issues. 93% say they care about green issues and 92% say that they had bought a green product within the last month. The challenge is for us in the sector to deliver credible and relevant information in an accessible format to those customers who seek it. Asda uses a multichannel approach with digital and established methods of dissemination including pack information. Read Chris’s full interview >>

We work with a large variety of clients that have equally varied perspectives on traceability. Some clients think in terms of strategic business management and optimizing their supply chains, some are using it to connect directly with consumers to tell the stories of their products. Others view it as a common-sense insurance policy. Each client has different needs, but one of the important things to acknowledge about traceability is that clients – and consumers – can all gain from implementing traceability into their products and communicating successes and failures. Read Melissa’s full interview >>

Companies with whom we work know that traceability is a hot topic in the mind of consumers. More and more, consumers want to know where their food comes from and how it was made, grown, or harvested. Many companies have sustainable sourcing policies with some level of transparency and traceability requirements in order to meet that market demand. You can’t satisfy the consumer’s needs without strengthening supply chain management.

We also see client companies using traceability to demonstrate their sustainability beyond requirements set by labels and certification schemes, supplying information on catch methods, vessels, species and so on. This specificity is only gained by direct sourcing from co-ops or fishermen, and by knowing first hand who is catching the product. The best companies see these types of relationships as true partnerships. With bigger distributors, it’s harder to get specific information about the impacts of the product. Some companies have strong traceability systems in place and some are still working to improve their systems. Seafood is a vital part of our food economy. It’s important that it be here for future generations, and our partners are embracing transparency and traceability as a necessary part of that. Sustainability, and ensuring traceability of a seafood product, helps to ensure supply for the future.

Food safety is often a concern for consumers as well. If a product is fully traceable, food safety concerns can be minimized. Legislation concerning the legality of seafood imported into the U.S. was recently passed, requiring greater transparency and traceability. Companies unable to provide full supply chain traceability for at-risk species may run into difficulties importing that product into the U.S., let alone getting it on the shelves of U.S. supermarkets. Read Julie’s full interview >>

Cocoa and chocolate companies think about transparency with respect to both supply chain management in order to be able to follow the consignments of product through from the cocoa on the farm to the end user and also to be able to communicate to business and/or consumer customers. The importance of traceability increases with risk associated in the supply chain (could be risks associated with the quality of a product, or practices associated with the development of the product, etc.) Read Jennifer’s full interview >>

How should companies think about traceability and transparency?

Companies should not be afraid to fully disclose their sources. Opening your supply chain for closer scrutiny does not mean trade secrets will be compromised. The decision to be transparent does mean, however, that you are willing to bear all to your customer and work to make improvements where necessary. This consumer trust can carry long-term dividends such as strengthened brand loyalty.

Traceability also makes good business sense. If a company knows where the product is in any given link in the supply chain, it is easier to pinpoint where things may go wrong, isolate issues, and correct problems almost immediately. This can save time and money in the long run and lead to a more effective and streamlined supply chain. Read Julie’s full interview >>

As a first step, companies should think about what the purpose of traceability and/or transparency is for their organization. Neither is an ‘end’ in and of itself but rather a ‘means’ toward something else. Traceability may be used to ensure that the supply chain is in compliance with certain declared practices. Having this traceability may then enable transparency to be able to openly report outside the organization on the practices. And this transparency then will enable accountability by the company that it is acting in a manner aligned with what it communicates in terms e.g., of a social impact commitment. Once determining the specific objectives, it will also enable a company to then map out the supply chain and determine where the greatest risk areas are to then determine in which areas traceability is most crucial. Without doing some of this initial framing and prioritizing, companies may end up spending a lot of extra money and time to build in traceability in areas that are not crucial. Read Jennifer’s full interview >>

Transparency is a qualifier for an increasing proportion of consumers. In a connected world the access to information and its transfer is increasingly rapid. Businesses need to be part of their own conversations. My perspective is that seafood had some of the earliest and, probably, most intensive scrutiny compared to, as an example, livestock. Many of the initiatives on primary production assurance are now common across food production (aquatic and terrestrial), but seafood has been the pathfinder of what are now commonplace business structures. Read Chris’s full interview >>

When purchasing, consumers generally are looking for known products they can find at reasonable prices. Traceability and transparency supports those two principles. For example, look at the seafood industry. Illegal product is estimated to currently account for $2 billion (USD) of the wild-caught seafood imports into the US market. An increase in transparency and traceability will help to drive that product out of the market, creating opportunities for good products and helping to sustain fair pricing for legally caught seafood. Furthermore, consumers now will have the advantage of knowing precisely where the fish they’re having for dinner was caught. It’s nearly impossible for responsible companies to compete with the low prices for which illegal product is currently sold, so transparency is a fantastic tool for companies to help push illegal product out of the market. Read Melissa’s full interview >>

What are some examples of companies getting market value from traceability?

There are a number of great examples, such as Del Pacifico Seafoods, which has recently achieved Fair Trade certification for a Mexican shrimp fishery they work with in the state of Sinaloa, thanks in large part to the excellent traceability they have helped to create in that supply chain. This is bringing a price premium as well as access to new markets. We’ve similarly worked with North Atlantic Seafood in Indonesia to increase monitoring of their tuna and snapper fisheries, which has helped them market their sustainably caught products. Read Melissa’s full interview >>

The Ocean Disclosure Project is a substantive commitment to open and honest information. The value in being able to quickly and accurately dispel misconceptions about our fish sourcing has been incredibly useful for Asda. In the modern ‘connected world’ it has to be feasible or prudent to assess negative views and not avoid them. Experience shows if you don’t tell your story somebody else will for you! Read Chris’s full interview >>

Being able to tell a story about the origin or provenance of your seafood product and/or the fisherman who caught it is a huge market value that supply chain traceability can help provide. Consumers can choose which brands to support based on the stories behind their products and what resonates with them. For Fair Trade CertifiedTM products, we’ve found that consumers engage more with products that have a backstory. Having a traceability system that provides the detailed information needed to tell that backstory – whether it’s on the packaging, on a website, or on social media, helps differentiate products in supermarkets, in turn making it easier for consumers to shop their values. Read Julie’s full interview >>

In the cocoa/chocolate value chain there is an increased move towards traceability/transparency. One indication relates to the use of certification schemes by cocoa and chocolate companies. In addition, companies have their own sustainable sourcing programs which emphasize traceability and in turn transparency of company practices and practices by those throughout the value chain. For example, Mondelez tracks farmer volume and premium in its Cocoa Life Program. Further it is very transparent in sharing its progress, results and learnings. Lindt & Sprungli emphasizes knowing where the beans come from in its sustainability program, and TCHO’s business model revolves around partnering directly with the cocoa producers. These examples show the increasing focus on tracing the ‘bean to bar’. These and many more emphasize the move towards more transparency by companies of their practices and results. When a differentiator, these actions help companies get market value. Read Jennifer’s full interview >>



Related content

Key papers: CONSUMER TRUST GlobeScan. 2017. Trust and Transparency In the Supply Chain. GlobeScan eBrief. 5pp.“Diminishing trust in a range of institutions has become a central issue, especially when it comes to the relationships between business and society.” HUMAN...

“Being able to show year-over-year progress against a baseline, and being able to speak to this movement (positive or not as positive) is essential to maintaining authenticity and transparency with stakeholders” —Jill Davies, Target Different supply chains have...

“If we are all going to have to get naked, we might as well get buff.” This quote from Andy Ruben, the first CSO of Walmart, is in reference to transparency. The statement came up during our interviews with companies who have already begun their journey toward greater...

Julie Kuchepatov is Seafood Director at Fair Trade USA SeaWeb: What do you think is the future of traceability and transparency? Julie Kuchepatov: Full traceability allows seafood products to be traced throughout the supply chain back to the point of harvest....

Chris Brown is Senior Director Sustainable Business at Asda SeaWeb: What do you think is the future of traceability and transparency? Chris Brown: This area is going to be a high priority for all types of food chains. Seafood has had to develop with IUU regulations...

Melissa Garren is Chief Scientific Officer of Pelagic Data Systems SeaWeb: What do you think is the future of traceability and transparency? Melissa Garren: The marketplace expectations for traceability and transparency seem destined to grow, especially considering...

Jennifer Golden is Director of Monitoring & Evaluation at the World Cocoa Foundation SeaWeb: What do you think is the future of traceability and transparency? Jennifer Golden: Before talking about traceability and transparency we need to differentiate the two....

Since setting up an office in Bentonville, Arkansas, in 2007, the Environmental Defense Fund has made impressive strides with Walmart to improve the social and environmental sustainability and responsibility of their myriad supply chains. By setting big-picture goals, and identifying environmental and social hot spots in supply chains, even large-scale retailers can change significantly for the better.

In February 2017, Blueyou announced the first dual-certified Fair Trade and MSC seafood product: canned skipjack tuna fished from the Maldives. The Maldives is square in the middle of the Indian Ocean—an area heavily fraught with fisheries management challenges. So how, and why, did Blueyou manage to improve transparency in their supply chains, achieving dual certification, for one of the most challenging species and regions?

In April, 2017 the Sustainable Fisheries Partnership announced that, through its Ocean Disclosure Project (ODP), US retailer Publix would move to publish a list of all of the fisheries from which they source seafood, as well as information on management at those fisheries, catch method, and environmental impact.